Financial Institutions’ Know Your Business (KYB) data requirements are stringent but necessary in the context of our multi-trillion dollar global financial crime problem. This data help institutions understand their clients’ motives, allowing them to rule out, within a reasonable margin of error (risk tolerance), the likelihood that a corporation is being used for illicit activities.
Criminals are running increasingly sophisticated programs to elude detection, making it harder than ever to be sure. And while financial institutions are not solely responsible for detecting and preventing these crimes, they are wholly liable for ensuring their KYB programs are robust and fuelled by the most reliable and up-to-date information available.
Operating across multiple jurisdictions adds another layer of complexity to KYB data challenges. This blog will explore the data challenges faced by regulated institutions, focusing on corporate registries as a key data source, and will propose a comprehensive, holistic solution for KYB.
The issues surrounding corporate registries
Corporate registries were established to provide a public record of business entities, ensuring transparency and accountability in the corporate world. Over time, these registries have evolved to include comprehensive information on company ownership, financial health, and regulatory compliance, thereby playing a crucial role in preventing fraud and fostering trust in the business environment.
While these registries offer a one-stop-shop for KYB data in theory, they can be ineffective and unreliable in practice. Across jurisdictions, registry data varies significantly, with different data standards and formats as well as deeper issues surrounding completeness and accuracy. Further, access to this data is not free and open in all cases. To illustrate, we have collated just a few examples to illustrate the differing standards:
| Jurisdiction | Open Access | Cost | Single Source | Download Limit | Digital |
| United Kingdom | Yes | No | Yes | No | Yes |
| United States | Basic Only | Tiered | No | No | Yes |
| Lithuania | No | Tiered | Yes | Yes | Yes |
| Austria | Yes | Yes | Yes | No | Yes |
| China | Basic Only | Yes | No | Yes | Yes |
| Singapore | Yes | Tiered | Yes | Yes | Yes |
| Anguilla | Basic Only | Yes | Yes | Yes | Basic Only |
| Egypt | No | Yes | Yes | Yes | Basic Only |
United Kingdom
The UK registry, Companies House, offers open access to comprehensive data without cost, making it an excellent resource for KYB purposes. Companies House is renowned for its transparency and ease of use, providing free access to detailed company information, including ownership and financial health. Users can easily search for and download company reports, enhancing the efficiency of KYB processes.
While the UK’s Companies House is lauded for its transparency, it has faced criticism for inadequate data verification, which undermines confidence in its accuracy. Whilst we await the full implementation of the Companies House Reforms, the registry lacks the authority to verify data authenticity, allowing fraudulent information to persist.
Singapore
BizFile+ in Singapore provides detailed company data via a digital portal, without the need to register. However, only basic information is available for free, with the costs of additional information varying according to the type and volume required. Further, extensive lists of company profiles cannot be downloaded in one go – each download is typically processed per company, meaning information must be acquired one company at a time or through predefined data packages and bundles. This can pose a limitation for users needing information on multiple companies, despite the underlying availability of comprehensive data.
Lithuania
Navigating Lithuania’s regulations on company data access poses notable challenges; public searches face substantial restrictions, with detailed registration information on legal entities accessible solely to registered users under a service provision agreement. Even for these users, searches are capped at 100 per day, significantly limiting the availability and ease of obtaining comprehensive company data.
Egypt
Egypt’s registry, managed by the General Authority for Investment and Free Zones (GAFI), is less accessible. While GAFI provides some information online to Egyptian citizens only, detailed company records are not freely accessible for download. Users may need to visit GAFI in person or contact them for specific requests, presenting significant challenges for international firms seeking comprehensive KYB data.
Firms must overcome the inconsistencies and challenges of accessing corporate registry data for all the jurisdictions relevant to their clients. Once accessed, the data from each must be transformed, standardised and stored internally, resolving any conflicting information along the way, before the ultimate purpose of this exercise can begin – analysing the data to measure the financial crime risk of each client.
The quantitative and qualitative scale of variation between registries means that firms could spend enormous time and resources on KYB data operations alone. Increasingly, this burden is being outsourced to specialised organisations so that the institution can focus on the core business operations which satisfy and grow its client base. This not only reduces operational strain but also enables staff to focus their expertise on the highest-risk cases, enhancing the overall efficiency and effectiveness of compliance teams.
Getting the most out of corporate registries with holistic KYB
Firms no longer need to build, run, and maintain hundreds of separate data integrations with corporate registries. NorthRow has developed a holistic KYB solution that sources company information from an unparalleled set of over 200 data providers, both public and private. The accessibility challenges surrounding corporate registries are addressed, and issues concerning completeness and accuracy are resolved by combining registry data with commercial datasets.
With NorthRow, firms have a single source of KYB data, reducing the need for hundreds of unique data ingestions, transformations, and translations. This data is available through NorthRow’s user-friendly WorkStation interface or its Seamless API, simplifying access and use.
Solving your KYB data requirements with NorthRow comes with multiple added features which compound your efficiency gains:
- Analysis: Quickly identify Ultimate Beneficial Owners (UBOs) and continuously monitor changes in business risk profiles, including ownership changes and adverse media.
- Compliance Performance: Identify compliance bottlenecks, streamline approval processes, and reduce average processing times through automated data analysis, enhancing your KYB compliance and risk management.
- Customer Experience: Automate identity verification in real-time with biometrics and liveness checking, ensuring regulatory compliance while improving customer experience and reducing time to revenue.
